Over this last year, viewers might have noticed a new sensation growing in the sports industry. 2019 has seen a boom of popularity in daily and weekly fantasy sports contests. The two biggest names in daily fantasy, DraftKings and FanDuel can give users the chance to turn $5 dollars into $5 million. Its incredible increase in popularity is due to its low risk betting, but critics such as New York State attorney general Eric T. Schneiderman have hammered the sites saying "their games constitute illegal gambling under state law." Additionally, DraftKings is under FBI investigations for the possibility of insiders being able to play on rival sites using player information, almost guaranteeing a winning gamble. The result of these allegations has led to both daily fantasy being banned in Nevada, and most recently in the state of New York. Now the fantasy companies are fighting back, clashing with Schneiderman, who ordered the cease and desist and has forced them to stop accepting bets from the state. Now DraftKings and FanDuel are up at arms against the attack, and fans are with them, although Schneiderman seems to be standing by his decision.
To understand the controversy, you need to know what daily and weekly fantasy sports are and how they make money. Fantasy sports were already popular prior to DraftKings being founded in 2012, but those games are played yearly over an entire season. Weekly fantasy sports are games where the user selects among various valuable players worth a certain amount of salary, but the money is fake. This is called a lineup entry. It cost from $3 to around $2,000 to enter a contest depending on the amount of players in the contest. The more players in a contest, the less it cost to enter and vice versa. The user earns points depending on the scores their selected players get. The top scoring users win money depending on their placing. The argument against DraftKings and FanDuel is that it is luck that decides who wins, and not the skill of the user's selected players.
Joe Drape of the New York Times wrote an article that expands on Schneiderman's thinking for making the decision against this form of betting. Drape explains that the attorney general has a history of being an advocate for protecting consumer rights, and that the gambling used is based off of luck, and not the skills that both companies advertise. “It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” Mr. Schneiderman said, adding, “Today we have sent a clear message: not in New York, and not on my watch.” NBC.com included additional input on the situation in their own article. Writer Erik Ortiz, the article contributor, who took the more defensive side, summarizing that both DraftKings and FanDuels have the opportunity challenge the cease and desist in court. But Ortiz also refers to letters NBC received. "Like most gambling operations, DraftKings'/FanDuel's own numbers reveal a far different reality," states the letter, "in practice, (daily fantasy sports) is far closer to poker in this respect: a small number of professional gamblers profit at the expense of casual players." Ortiz's opinion further shows that even though there is a good defense against DraftKings/FanDuel, it is based on the idea that their contest take luck instead of skill. Meaning, there is hope for fans.
Ortiz adds more of the argument for to the debate. In his article, he quotes a DraftKings spokesperson as saying, "We strongly disagree with the reasoning in his opinion and will examine and vigorously pursue all legal options available to ensure our over half a million customers in New York State can continue to play the fantasy sports games they love." Over 500,000 customers will now be unable to use the websites in the state of New York, and the fantasy sports companies have been hit hard in sales revenue. DraftKings declared that Shniederman's "hasty actions" did not give him a chance to fully view the contest in their entirety. If the attorney general viewed the mechanics of the games in depth, he would understand it as more skill than luck. Ortiz also mentions more of the DraftKings plan for taking defense. "We strongly disagree with the reasoning in his opinion and will examine and vigorously pursue all legal options available to ensure our over half a million customers in New York State can continue to play the fantasy sports games they love," a DraftKings spokesperson said, quoted in the NBC article.
While DraftKings will fight in the court, it is also encouraging fans to sign a petition online, and its community has certainly done so. "This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, co-workers and players across the country," FanDuel said in a statement. But it is one of DraftKings own insider employees that has been seen as the cause of this recent attention. A mid level employee at DraftKings was under fire after a scandal erupted after the employee admitted to having inadvertently released insider data. And who would win $350,000 at a rival company, presumably FanDuel. It damaged the authenticity of the site and questioned who has access to valuable statistics. The New York Times article states that critics have complained that the setup is hardly different from Las Vegas-style gambling that is normally banned in the sports world.
In this topic of debate, there are many reasons for and against it. In the upcoming weeks, there will surely be more to the story, and what progress has been made by each side. Both article authors express the fact there are many supporters for the daily/weekly fantasy sports giants, but more importantly that there is good reason why Schniederman took the stance he did.